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IASB to consider possible narrow-scope amendment to IFRS 17

May 18, 2021

At its upcoming meeting on 24–27 May 2021, the IASB will discuss the accounting for derecognized financial assets when insurers first apply IFRS 17 'Insurance Contracts' and IFRS 9 'Financial Instruments'.

The subject of discussion will be an accounting mismatch between financial assets and insurance contract liabilities that could arise at the beginning of the comparative period when financial assets have been derecognized during the comparative period. The mismatch arises because entities are not permitted to restate comparative information for those assets.

As explaining this mismatch to users of financial statements would be difficult and would not provide useful information because it does not represent an economic mismatch, the staff is asking the Board whether it wants to develop a narrow-scope amendment that would reduce the accounting mismatch, without having a wider effect and creating a risk of unintended consequences.

The amendment the staff is proposing would permit an entity, on initial application of IFRS 17, for the purpose of presenting comparative information, to elect to measure at fair value through profit or loss financial assets derecognized between the transition date and date of initial application of IFRS 17. The transition requirements in IFRS 9 would remain unchanged.

Review the paper for the session (scheduled for Monday May 24, 2021, 13:15-14:15) on the IASB's website.

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Accounting and Auditing Standards Oversight Councils Initiate Review of Standard Setting in Canada

May 13, 2021

On May 13, 2021, the Accounting Standards Oversight Council (AcSOC) and Auditing and Assurance Standards Oversight Council (AASOC) announced that they have initiated a review of Canadian standard setting. The Independent Review Committee on Standard Setting in Canada was formed to review of the governance and structure for establishing accounting, auditing, and assurance standards, as well what might be needed for the future – including sustainability standards.

The Committee will make recommendations to ensure Canadian standard setting will continue to be independent and internationally recognized.

Review the press release.

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PCAOB issues proposal related to determinations under the Holding Foreign Companies Accountable Act

May 13, 2021

On May 13, 2021, the Public Company Accounting Oversight Board (PCAOB) issued a proposed rule, "Board Determinations Under the Holding Foreign Companies Accountable Act (the “HFCAA”)". Comments are requested by July 12, 2021.

The proposal would establish “a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.”

Review the press release, proposed rule and statements by PCAOB Chairman William D. Duhnke and board members Duane M. DesParteRebekah Goshorn Jurata, and Megan Zietsman on the PCAOB’s website.

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SASB’s Standards

May 12, 2021

On May 12, 2021, the Sustainability Accounting Standards Board (SASB) published the French translation for its 77 industry Standards.

SASB Standards identify the subset of environmental, social, and governance issues most relevant to financial performance in each of 77 industries. They are designed to help companies disclose financially-material sustainability information to investors.

SASB’s rigorous and transparent standard-setting process includes evidence-based research, broad and balanced participation from companies, investors, and subject matter experts, and oversight and approval from an independent Standards Board. Supporting materials related to the development of the standards are available in the Standard-Setting Archive.

Review the press release and download the standards on the SASB's website.


IFRS Foundation announces webinar series on disclosure requirements in IFRS Standards proposals

May 10, 2021

On May 10, 2021, the IFRS Foundation announced a series of webinars on IASB exposure draft "Disclosure Requirements in IFRS Standards — A Pilot Approach".

In March 2021, the IASB issued the ED which contains proposed guidance for itself when developing and drafting disclosure requirements in IFRSs in future as well as proposed amendments to IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits that result from applying the proposed guidance to those standards. The first webcast is scheduled for 19 May 2021 and will provide an overview of the Board’s proposals. For the con­ve­nience of par­tic­i­pants from different time zones, there will be two sessions of the webinar both dis­cussing the same topics:

  • Wednesday 19 May 2021, 09:00–10:00 BST and
  • Wednesday 19 May 2021, 15:00–16:00 BST.

Each session will last a maximum of 60 minutes and include a moderated ques­tion-and-an­swer session.

Review the press release on the IASB’s website.

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Strong support for ISSB at IOSCO roundtables

May 10, 2021

To support its work on securities issuers’ sustainability-related disclosures, the International Organization of Securities Commissions (IOSCO) hosted two roundtables in April and May 2021. The objective was to engage in a dialogue with global stakeholders on IOSCO’s priorities to enhance the reliability, comparability and consistency of sustainability-related disclosures and collect views on the practical implementation of a global system architecture for these disclosures.

Participants of the roundtables emphasised the importance of continuing the pace and building on the existing momentum to deliver the urgent improvements needed in sustainability reporting and especially supported establishing an International Sustainability Standards Board (ISSB) under the IFRS Foundation. There was a clear willingness among participants to work collaboratively with IOSCO and the IFRS Foundation to deliver this vision. There was also broad-based agreement that, building on existing initiatives, the ISSB would be able to deliver high-quality international sustainability-related reporting standards in a timely manner. Roundtable participants also identified some important matters for IOSCO to consider before recommending to its members that ISSB standards be used for cross-border offerings or when setting sustainability reporting requirements at the domestic level.

Review the report of the key messages received during the roundtables on the IOSCO's website.

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IESBA COVID-19 Working Group: 5 Ethical Challenges that Will Intensify as the Pandemic Wanes

May 10, 2021

On May 10, 2021, the International Ethics Standards Board for Accountants (IESBA) released an article examining several ethics considerations that will be especially pressure tested during this period of recovery.

A working group formed by the IESBA and national ethics standard setters (NSS) from Australia, Canada, China, South Africa, the UK and the US has released 5 Ethical Challenges that Will Intensify as the Pandemic Wanes, a look at the key ethical issues that lie ahead for professional accountants as the COVID-19 pandemic moves into the next phase. This informative, deep-dive article revisits many of the topics the working group cited previously as ethical challenges brought on by the pandemic and provides updated context and insights to help the professional accountant navigate a continually evolving economic and societal recovery.

Review the press release and article on the IESBA's website.


IASB to conduct fieldwork on its disclosure review ED

May 07, 2021

On May 7, 2021, the International Accounting Standards Board (IASB) is inviting preparers of financial statements to participate in fieldwork to test the proposals in the exposure draft ED/2021/3 "Disclosure Requirements in IFRS Standards — A Pilot Approach (Proposed amendments to IFRS 13 and IAS 19)" published on March 25 that contains proposed guidance for itself when developing and drafting disclosure requirements in IFRSs in future as well as proposed amendments to IFRS 13 "Fair Value Measurement" and IAS 19 "Employee Benefits" that result from applying the proposed guidance to those standards.

The IASB is looking for preparers that would conduct fieldwork using its instructions and questionnaires to test the application of the proposed new requirements in IFRS 13, IAS 19 or both. Participants would then summarize and report the results of the fieldwork.

Review the press release on the IASB's website.


IASB publishes amendments to IAS 12

May 07, 2021

On May 7, 2021, the International Accounting Standards Board (IASB) published "Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)" that clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations.



The IFRS Interpretations Committee received a submission about IAS 12 Income Taxes and the recognition of deferred tax in relation to leases (when a lessee recognizes an asset and a liability at the lease commencement) and decommissioning obligations (when an entity recognizes a liability and includes the decommissioning costs in the cost of the item of of property, plant and equipment). The submitted fact pattern assumed that lease payments and decommissioning costs were deductible for tax purposes when paid and identified different approaches in practice.

The Committee discussed the submission and came to the conclusion that the matter was relevant and widespread, as there are various kinds of contracts and fact patterns affected. Moreover, the question as to whether tax deductions are attributable to a contract, a (single) asset/liability, or rather to cash flows, and as to which consequences this may have for determining temporary differences, is fundamental within IAS 12. Therefore, the Committee recommended that the IASB develop clarifying amendments to IAS 12.

The IASB discussed the issue and in July 2019 published an exposure draft of proposed clarifying amendments, which have now been finalized.



The main change in Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) is an exemption from the initial recognition exemption provided in IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption does not apply to transactions in which both deductible and taxable temporary differences arise on initial recognition that result in the recognition of equal deferred tax assets and liabilities. This is also explained in the newly inserted paragraph IAS 12.22A.


    Effective date and transition

    The amendments are effective for annual reporting periods beginning on or after January 1, 2023. Early adoption is permitted.

    An entity applies the amendments to transactions that occur on or after the beginning of the earliest comparative period presented. It also, at the beginning of the earliest comparative period presented, recognizes deferred tax for all temporary differences related to leases and decommissioning obligations and recognizes the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at that date.


    Additional information


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    Independence beyond Rules: Farsighted approaches to global challenges

    May 07, 2021

    On May 7, 2021, the International Ethics Standards Board for Accountants (IESBA) released a speech by Dr. Stavros Thomadakis given virtually at the British Accounting and Finance Association's Audit and Assurance Conference on the importance of independence.

    Review the full speech on the IESBA's website.

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